Restaurant sales increased in December, while menu prices continue to exceed the rise in grocery store prices. Tim Hortons' battles with some of their franchisees. Pizza Hut joins with Toyota to develop delivery vehicles. Red Robin will eliminate the bus boy position in its restaurants. These stories and a whole lot more This Week in Foodservice.

The U.S. Census Bureau reported U.S. retail sales increased 0.4 percent in December from November and were up 5.4 percent compared to December 2016. Overall, December’s performance exceeded a number of forecasts. For 2017 total retail sales increased 4.2 percent.

The Census Bureau revised November total retail sales up 0.1 percent for a final reading of +0.9 percent.

Sales at foodservice and drinking place sales increased 0.7 percent in December compared to November. December 2017 sales increased 4.2 percent compared to December 2016. For the entire year of 2017, restaurant and bars saw sales rise 2.8 percent. However, the advance report changed the initial sales figure down slightly to +0.5 percent from +0.7 percent. In other words, 2017 marked another year of modest growth for the restaurant industry.

Please note the advance sales numbers are based on a small sample and are subject to revision. And the study only includes restaurants and bars. Foodservice operators not surveyed include hotels, resorts, clubs, retailers, employee feeding, healthcare, education, and military feeding.

Economic News This Week

Initial-jobless claims rose 11,000 to a level of 261,000for the week ending Jan. 6. The less volatile 4-week moving average rose by 9,000 claims to a final level of 250,750. The Department of Labor continues to report claim filing difficulties in Puerto Rico and the U.S. Virgin Islands.

The Producer Price Index fell 0.1 percent in December. The Index for Final Demand Goods was flat while the Index for Final Demand services fell 0.2 percent. The Producer Price Index for final demand rose 2.3 percent for 2017. The Producer Price index for foods fell 0.7 percent in December.

Tim Hortons’ parent company lashes out at rogue franchisees.Ontario Tim Hortons franchisees drew the ire of Restaurant Brands International when it was revealed the franchisees were cutting benefits and in some cases, wages. The cuts were evidently in response to a minimum wage increase in Ontario by $2.40 to $14 per hour. Originally, RBI had stated that it was strictly a matter for the franchisees but took a harder line when criticism arose from the public.

Darden will pass along some tax savings to employees.Darden Restaurants says the newly enacted federal tax bill will save the company about $70 million in its third quarter. As a result, Darden plans to pass on $20 million to its employees. The company did not provide any additional details.

Corporate Stirrings: Pizza Hut plans to sell 77 corporate owned units in North Texas to Ampex Brands. Ampex owns 128 Pizza Huts as well as 218 KFCs, 38 Taco Bells, 68 Long John Silvers, and 49 Tim Hortons. In the past quarter, Ampex purchased 52 KFC locations in Columbus, Ohio, and Oklahoma City. MOD Super Fast Pizza Holdings Inc. has raised $33 million in additional equity and closed on a $40 million credit facility. MOD will use the funds to support the chain’s expansion. WKS Restaurant Group will acquire Pennant Foods, an operator of 52 Wendy’s restaurants in Southern California. WKS operates more than 180 franchised restaurants including Denny’s, Pollo Loco, Krispy Kreme Donuts, Corner Bakery Café, and Blaze Pizza.

Growth Chains: Black Bear Diner will open 19 locations in California and Texas in the next 6 years. Chic-fil-A will open 19 restaurants across the USA in January. Dickey’s Barbecue Pit’s franchisee in Arizona will open four restaurants. MOD Pizza will open 110 restaurants this year. CKE will open its first restaurant in New York City, a Carl’s Jr. at Coney Island. Wendy’s opened 60 restaurants in the International market last year.